Lockheed, Northrop Post Higher Profits, But Stocks Fall

Reuters

Tuesday, 24 Apr 2007 | 3:06 PM ETReuters

SHARES

Lockheed Martin said that first-quarter profit rose a greater-than expected 17% as the world's largest defense contractor posted higher sales of information systems for government customers and had a number of one-time gains.

Northrop Grumman's earnings rose less than predicted as strike costs cut into the bottom line.

Despite the earnings rise, Lockheed shares fell more than 1% and Northrop shares lost more than 2% .

Lockheed, maker of F-16 fighter jets, Patriot missiles and an array of systems for the U.S. government, also raised its full-year profit forecast to take account of the gains and better performance across the board.

Lockheed -- which outsold rivals Boeingand Northrop Grumman to be the Pentagon's No. 1 supplier last year -- reported quarterly profit of $690 million, or $1.60 a share, compared with $591 million, or $1.34 a share, a year earlier.

Taking out 21 cents a share of one-time gains, Lockheed had earnings of $1.39 a share. Wall Street's average forecast was for $1.37 a share, according to Thomson Financial.

“I think there remains very strong bipartisan support for defense of the nation and the kind of programs we’re involved in -- the longer-term programs that involve the assets we’re going to need over the next five, 10, or 15 years to fight the war on terrorism and any other threats,” Ronald D. Sugar, Northrop Grumman's chief executive officer, told CNBC’s "Power Lunch."

A nearly month-long strike at Northrop's Ingalls shipyard in Pascagoula, Miss. -- which ended April 4 -- cut the company's profit by about 2 cents a share, Northrop executives said in an interview.

For the full year, Northrop kept its earnings forecast unchanged at $4.80 to $5.05 a share. Wall Street is expecting $5.00 a share, on average.

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